26 TXU’s Texas Program Is Progressing Well, Despite Market Shifts In Cost And Regulatory Delay Leveraged Kaizen events to design most economical advanced supercritical boiler that is carbon capture and sequestration ready Plant design Uncovering opportunities for improvements to be used in next phase Supply chain Successfully executed significant hedging transactions to support ability to project finance Hedging Open book process continuing on schedule Some labor pressure, but plants coming in on schedule Construction Reference plant draft permits issued - final permits expected 2Q07 Oak Grove delayed to January but no impact on critical path Sandow consent decree pending resolution Permitting Gas weakened slightly Reserve margin expectations continue to tighten Market environment Active negotiations with over 1 GW of long-term demand In discussions to sign up majority of long-term Texas demand PPA’s Obtained commitment for $11 billion non-recourse project financing Continuing to evaluate optimal capital structure Financing LOI’s signed or in approval process for sale of 600 MW of Oak Grove and 50% of another facility Sell down process for equity participation in program underway Equity partnerships Constructive negotiations with shippers based on size and dual rail access Rail and fuel Remarks Grade Category Low High | 
